Cash Market Moves

A Norfolk Southern train carrying hazardous chemicals derailed in East Palestine, Ohio, a town of approximately 5,000 people, on Feb. 3. The train consisted of three locomotives, nine empty cars and 141 loaded cars, with 50 of those cars derailing. The incident has put railroad safety and federal regulations of the railroad industry under a microscope.

While the derailment released toxic fumes into the air, what followed only added to the disaster.

On Feb. 5, emergency crews conducted a controlled burn of the spill at the request of state officials, which released hydrogen chloride and phosgene into the air. As a result, residents within a 1- to 2-mile radius were evacuated, and an emergency response from agencies across three states was initiated, according to Wikipedia.

COULD STRICTER RULES HAVE BEEN PREVENTED?

Immediately following the derailment, there was speculation as to what caused the accident and if it could have been prevented. One major issue being discussed is electronically controlled pneumatic (ECP) brakes, which stop the entire train all at once versus air brakes that stop cars one by one. A rule issued in 2015 by the Obama administration would have required certain trains to install these brakes.

That rule, titled the Enhanced Tank Car Standards and Operational Controls for High-Hazard Flammable Trains (HHFT), was released by the Pipeline and Hazardous Materials Safety Administration (PHMSA) in coordination with the Federal Railroad Administration (FRA) on May 8, 2015.

"This rulemaking is intended to reduce the likelihood of train accidents involving flammable liquids and mitigate the consequences of such accidents should they occur," the agencies stated when the rule was released (https://www.federalregister.gov/…). "Based on analysis of the risk of differing train compositions, this rule defines an HHFT as a train comprised of 20 or more loaded tank cars of a Class 3 flammable liquid in a continuous block or 35 or more loaded tank cars of a Class 3 flammable liquid across the entire train.

"For the purposes of advanced braking systems, this rule also defines a 'high-hazard flammable unit train' (HHFUT) as a train comprised of 70 or more loaded tank cars containing Class 3 flammable liquids traveling speeds at greater than 30 mph. The rule required the installation of ECP brake systems by 2023 for any trains meeting the definition of a high-hazard flammable unit train: a train comprised of 70 or more loaded tank cars containing Class 3 flammable liquids traveling at speeds greater than 30 miles per hour."

However, two years later, on Dec. 4, 2017, President Donald Trump's U.S. Department of Transportation (DOT) announced that it would withdraw the regulation requiring the use of ECP brakes on certain trains carrying flammable liquids, "on the grounds that the safety benefits were inconclusive, and the cost-benefit analysis was negative." (https://www.phmsa.dot.gov/…)

The DOT PHMSA then performed a revised cost-benefit analysis of ECP brakes. After reviewing the analysis, the DOT announced on Dec. 13, 2017, "After careful review, and as mandated by Section 7311 of the Fixing America's Surface Transportation (FAST) Act, the DOT has reviewed the final updated Regulatory Impact Analysis (RIA) and determined that the HM-251 Final Rule's electronically controlled pneumatic (ECP) brake requirements are not economically justified. As the expected benefits do not exceed the expected costs, PHMSA and the Federal Railroad Administration (FRA) will initiate a rulemaking to rescind the necessary regulatory provisions." (https://www.federalregister.gov/…)

However, even if the ECP rule had gone into effect, it wouldn't have applied to the Norfolk Southern train that derailed in Ohio. The NTSB was reported as saying that the train did not qualify as a "high-hazard flammable train."

In a Feb. 14 Tweet, U.S. Secretary of Transportation Pete Buttigieg said, "We're constrained by law on some areas of rail regulation (like the braking rule withdrawn by the Trump administration in 2018 because of a law passed by Congress in 2015), but we are using the powers we do have to keep people safe."

I contacted Sec. Buttigieg's office and asked why the current administration could not reinstate the ECP rule. In an email response sent to DTN by the DOT press office, a DOT spokesperson stated: "Not long after the rule was finalized, it was challenged in five different federal circuits, and Republicans in Congress secured a provision on a larger piece of legislation to require an independent cost-benefit analysis of the ECP braking requirement. This independent analysis determined the costs were greater than the benefits, allowing the Trump administration to repeal the rule a few years later, now making it tougher to do a new rulemaking in its current configuration due to threats of litigation and opposition in Congress."

The spokesperson added: "FRA and PHMSA are committed to improving rail safety and pending the results of the investigation in East Palestine, FRA and PHMSA will use the results to pursue additional safety measures as warranted. Of course, Congress can step in to provide safety mandates and we would welcome working with any member on either side of the aisle. However, the last time DOT proposed this effort, Congress pushed back. We hope to work with them on a bipartisan effort to improve rail safety."

LONG TRAINS, STAFFING ISSUES ALSO CITED

Besides the ECP braking rule issue, there is also concern by the public and even rail workers that some unit trains are just too long and not safe.

The issue of longer trains was raised as early as 2019. On May 30, 2019,

the U.S. Government Accountability Office (GAO) published a study stating: "Freight trains have been getting longer -- nearly 3 miles (200 cars) in some cases. This has raised concerns that trains may block traffic more often at road-crossings, impeding emergency responders and prompting unsafe pedestrian behavior (such as climbing through stopped trains). Braking and other operations can also be more complex for these longer trains."

Three years later, in December 2022, the FRA revisited the issue of long trains in a report titled, "Stakeholder Perceptions of Longer Trains" (https://railroads.dot.gov/…) In the report, FRA stated: "Views on specific safety concerns varied by stakeholder category. Railroad manager participants asserted that increasing train length does not pose new safety concerns. FRA participants shared some concerns, but their perspectives varied. Labor participants strongly asserted that very long trains (VLT) operations present new or increased safety concerns."

At least one state, Iowa, has introduced legislation this year to address the issue of long trains. FreightWaves reported on Jan. 31, 2023, that the Iowa House of Representatives introduced a bill on Jan. 26 that would restrict the length of freight trains operating in the. The bill would prevent railroad companies from running trains that exceed 8,500 feet in length, or about 1.6 miles. If signed into law, the rule could cost companies between $500 and $5,000 per violation, FreightWaves reported. The bill passed a three-member subcommittee on Jan. 27.

Another railroad safety issue that has been raised in recent years is staffing.

On June 14, 2022, the House Committee on Transportation and Infrastructure, Subcommittee on Railroads, Pipelines, and Hazardous Materials held a hearing "Examining Freight Rail Safety" (https://www.youtube.com/…). Among those testifying at the hearing were representatives from the Federal Railroad Administration (FRA), the National Transportation Safety Board (NTSB) railroad company executives and representatives from several railroad worker unions.

One of the union representatives testifying at the hearing, Jeremy R. Ferguson, transportation division president of the International Association of Sheet Metal, Air, Rail and Transportation Workers union, said, "A cry for rail safety has never been more needed or more appropriate."

"Despite all of the technology and modern-day advancements, the functionality of rail equipment is still crude, the hours are still relentless, and the work environment is still unsafe," Ferguson said. "Granted, some progress was made over the years, but much, if not most, has been undone with the adoption of a business model called Precision Scheduled Railroading (PSR)."

FRA Administrator Amit Bose noted during the hearing that the FRA is developing a Notice of Proposed Rulemaking (NPRM) addressing train crew staffing safety requirements.

"This proposed rule demonstrates FRA's belief that safety and innovation go hand-in-hand," Bose reported. "Historically, technological advances have enabled a gradual reduction in the number of train crew members. Today, with certain exceptions, most trains are operated with two-person crews. As technology continues to advance and automation is on the horizon, FRA intends this rule to serve as a tool to proactively address the potential safety impact of train operations with fewer than two crew members."

The FRA held a subsequent public hearing on Dec. 14, 2022, giving all interested parties a chance to offer their opinion on two-man crews. As of publication time, the FRA has yet to make a permanent rule on the two-man crew issue.

RESPONSES TO NORFOLK SOUTHERN TRAIN DERAILMENT

On Feb. 14, the NTSB released an update saying the investigation of the Feb. 3 Norfolk Southern freight train derailment in East Palestine, Ohio is ongoing.

"NTSB investigators have identified and examined the rail car that initiated the derailment. Surveillance video from a residence showed what appears to be a wheel bearing in the final stage of overheat failure moments before the derailment." Here is a link to their entire update:

https://www.ntsb.gov/…

On Feb. 17, the White House also released a statement (https://www.whitehouse.gov/…) saying the Biden administration is also monitoring the situation. "The Biden-Harris Administration is committed to supporting the people of East Palestine every step of the way and holding Norfolk Southern accountable," the White House stated. "Each Federal agency is playing its unique role in this task."

For its part, Northern Southern has stated on its website that it continues to work in the East Palestine community along with local, state, and federal officials.

On Feb. 16, Norfolk Southern President and CEO Alan Shaw shared a letter (http://nscorp.mediaroom.com/…) with the community of East Palestine, Ohio, on the company's website. In the letter, Shaw said: "When I visited East Palestine last week, you told me how the train derailment has upended your lives and how concerned you are about the safety of your air, water, and land. Our work is underway. Crews are cleaning the site thoroughly, responsibly, and safely.

"Our Family Assistance Center is helping community members meet immediate needs. Together with local health officials, we have implemented a comprehensive testing program to ensure the safety of East Palestine's water, air, and soil. And we have established a $1 million community support fund as a down payment on our commitment to help rebuild," Shaw added.

The railroad industry, too, says it takes such incidents as the Ohio derailment seriously.

The Association of American Railroads said in its Signal Newsletter emailed to DTN on Feb. 16, "While hazmat incidents are rare, railroads know that even one incident can impact a local community dramatically. Railroads take the responsibility of shipping hazmat seriously and are committed to keeping citizens and railroaders safe while continually driving toward an incident-free future."

For more information:

Rail unions welcome FRA's two-person crew rule: https://ble-t.org/…

Information on Precision Scheduled Railroading: https://www.gao.gov/…

GAO study on long trains: https://www.gao.gov/…

AAR: Why Freight Rail is the Safest Mode for Hazmat: https://www.aar.org/…

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow her on Twitter @MaryCKenn

(c) Copyright 2023 DTN, LLC. All rights reserved.